OPEC says 3 shirkers reaffirm cuts
GRANT SMITH AND WAEL MAHDI
OPEC said Iraq, the United Arab Emirates and Kazakhstan — which have lagged in their implementation of a deal to cut production — affirmed their commitment to the accord at a meeting in Abu Dhabi, United Arab Emirates.
“All expressed their full support” for the system to monitor the cutbacks “in order to achieve the goal of reaching full conformity,” OPEC said in a statement on its website. Malaysia also attended and made the same pledge.
The meeting, led by Kuwait and Russia, was scheduled after several nations faltered in their pledges to reduce output. Twenty-four producers, from the Organization of Petroleum Exporting Countries and beyond, agreed to cut production late last year to try to end a global glut.
Oil prices have fallen 8 percent this year on concern the agreement is failing to drain the world’s bloated oil stockpiles. On Tuesday, West Texas Intermediate crude for September delivery dropped 22 cents to settle at $49.17 a barrel on the New York Mercantile Exchange. Brent crude for October settlement fell 23 cents to end the session at $52.14 a barrel on the London-based ICE Futures Europe exchange.
Saudi Arabian Energy Minister Khalid al-Falih promised last month to intensify pressure on cheating countries.
Iraq and the U.A.E. said at the meeting that OPEC’s estimates of their production — based on data from external sources — were at fault for any apparent failures to comply, according to two people familiar with the matter who asked not to be identified because the discussion was confidential.
Iraqi compliance slumped to 29 percent in June, its lowest so far, while the U.A.E. made just 60 percent of its cuts, according to data from the International Energy Agency. Iraq has complained that the
● estimates OPEC uses to monitor compliance are inaccurate and that it has actually made the full reduction required.
Kazakhstan, rather than reduce its output as promised, has steadily increased it with the expansion of its Kashagan oilfield.
OPEC uses supply estimates compiled from six external entities, known as secondary sources, to monitor adherence to the deal. These include media outlets and institutions such as the Paris-based International Energy Agency and the U.S. government’s Energy Information Administration.
While the committee met, there were further signs of the diplomatic push to ensure full compliance.
Iraq’s oil minister, Jabbar al-Luaibi, is flying to Saudi Arabia at the invitation of alFalih, Iraq’s oil ministry said on Tuesday. The two officials will discuss coordination to achieve OPEC’s goals, Iraqi oil ministry spokesman Asim Jihad said.
The agreement brings together OPEC and non-OPEC nations in an effort to take as much as 1.8 million barrels of oil a day off the market.
Russia and Kuwait are two of the five nations that sit on the board that oversees the implementation of supply curbs. Saudi Arabia, which currently holds OPEC’s rotating presidency, also attended the meeting.